Almost any company in almost any industry faces the risk of a cyber security breach. Any time you digitally store personally identifiable information on clients or employees, such as credit card numbers, financial information, medical history, or contact information, you risk being hacked. Privacy and network security insurance is absolutely critical to guard against cyber exposure.
Cyber attacks are a serious risk with many possible repercussions. One major consequence is the possibility of a lawsuit and liability damages, since many clients are likely to sue if you leave their information at risk. This can cost a great deal due to legal fees, even if you don’t have to pay a settlement.
Additionally, many states have laws that require companies to notify anyone whose information was compromised in a cyber attack. Many specify that this must be done through mail or via a call center, and others require businesses to offer free credit monitoring. All of this can be very expensive. Some states may also levy fines or fees if your business is found to be negligent.
Finally, a cyber attack is bad PR; it can result in significant drops in sales. Not only will this lead to a revenue decrease, but it can often require a concerted (and expensive) public relations effort to help rehabilitate your company’s image. Cyber exposure can lead to a number of problems that can be resolved with the right insurance.